Research on the Nonlinear Effects of Digital Finance on Income Gap among Rural Residents——Empirical Evidence from the PSTR Model
Narrowing the income gap among rural residents is key to achieving com-mon prosperity for all people.Based on data from the China Household Finance Survey(CHFS)and Peking University's Digital Inclusive Finance Index,this study employs a Panel Smooth Transition Regression(PSTR)model to empirically ex-amine the nonlinear effects of digital finance on the income disparity in rural areas,using economic development level as a transition variable.Specifically,the impact of digital finance,including its coverage breadth,usage depth,and degree of digitali-zation,shifts from an expansive effect to a diminishing effect as economy increases.The transition around the threshold exhibits a smooth and rapid change trend.This re-search indicates that the impact of digital finance on income disparity among rural inhab-itants is characterized by intricate nonlinear effects,suggesting that the inclusive effects of digital finance can only be realized at certain levels of economic development,thereby con-tributing to better addressing income distribution and reaching shared prosperity.
Digital FinanceIncome Gap among Rural ResidentsEconomic Devel-opmentPSTR Model
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